Shopping around for annuities doesn’t look very innovative from Nest

I have read the Pensions-Expert article. I have been a big fan of the gospel preached by Paul Todd that Nest could and would work towards providing pensions with a portion fixed and a part floating (along CDC lines). I call this “conditional indexation” and so has the pension world for a long time.

Pensions are not annuities, they aspire to more than annuities. I want the blue line to continue on my pension and not to be crushed into the bond based de-risking that annuities threaten us with wherever pensions still exist.

Nest is a collective scheme and it has no “end-game or need of annuities. we need to define the ambition as more than giving our money to an insurer in return for a guaranteed but visionless bulk purchase annuity. Ultimately we end up at the grey line of mediocrity that runs through the middle of this diagram,

The approach is innovative and is going in the right direction but it only goes so far and not far enough – swapping my investments for an annuity is not what I had hoped for from Nest and I want a promise that they will look beyond the dead hand of insurance.

So my response to Nest is for them to set their ambition higher and think more in terms of LGPS, USS and the Railways Scheme and less in terms of the annuity providers